SUPPLY PLANNING IN SUPPLY CHAIN

Decision Making under Demand Uncertainty

Which of the following products do you think has the highest demand uncertainty?

Engine oils for vehicles

Intra City bus tickets

Anti pollution face wash

Fifth generation defense aircrafts

✓ Correct
Feedback:
Fifth generation defense aircrafts have cutting edge technology and require huge
capital investment for their manufacturing. They are made only in small quantities
and require careful inspection right from their manufacturing and even after their
induction. Thus, they have the highest demand uncertainty within the options
provided.
Aggregate Planning
Company A plans its production according to the forecast demand. It hires additional
manpower when the demand is high and lays off manpower during the period of
lean demand. Which of the following aggregate planning strategies does it deploy?

Level strategy

Chase strategy

✓ Correct
Feedback:
Correct answer! A chase strategy is employed when the company's production is
constantly chasing the demand. Here, capacity is the lever for the company and the
workforce keeps changing to meet the demand.
Aggregate Planning
Company B is in the small water turbine manufacturing business. The manufacturing
process is a complex one and requires heavy training of the workforce. Thus, the
company does not lay off its workforce frequently. The demand for small water
turbines is constant throughout the year. 
Which of the following aggregate planning strategies does it deploy?

Level strategy

✓ Correct
Feedback:
Correct! A level strategy allows a company to maintain a steady production rate as
well as a steady workforce in the organisation. The advantage of using a level
strategy is a well-trained workforce. Thus, it is best suited for company B.

Chase strategy

Hybrid strategy